Thirteen Democratic state attorneys general want to force companies into revealing their efforts to fight climate change.
The letter — which is signed by the attorneys general of California, Connecticut, Delaware, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New York, Oregon, Vermont, Maryland, and Wisconsin — demands that the Securities and Exchange Commission (SEC) push companies into more transparency over climate-related issues.
CNN Business — which obtained the letter — reports:
The states urged the SEC to require companies to make annual disclosures of their emissions and any plans to address them; analyze and disclose the potential impacts of both climate change and climate regulation; and disclose policies on corporate governance and risk management related to climate change.
“Climate change is not a distant problem to be dealt with in the future. It is here, and it threatens the US economy and its financial system,” says the group of lawyers, which was spearheaded by California. “Given the demand from investors for such disclosures, the significance of climate change risk to companies, and the importance of efficient capital allocation to climate-resilient companies, such disclosures are squarely in the public interest.”
In March, former SEC Acting Chair Allison Herren Lee welcomed public comment about “whether current disclosures adequately inform investors, public input is requested from investors, registrants, and other market participants on climate change disclosure.”
The deadline to submit public comment to the SEC is June 15. Among the questions posed by the agency were:
How can the Commission best regulate, monitor, review, and guide climate change disclosures in order to provide more consistent, comparable, and reliable information for investors while also providing greater clarity to registrants as to what is expected of them?
How, if at all, should registrants disclose their internal governance and oversight of climate-related issues?
What are the advantages and disadvantages of developing a single set of global standards applicable to companies around the world, including registrants under the Commission’s rules, versus multiple standard setters and standards?
What are the advantages and disadvantages of a “comply or explain” framework for climate change that would permit registrants to either comply with, or if they do not comply, explain why they have not complied with the disclosure rules?
What climate-related information is available with respect to private companies, and how should the Commission’s rules address private companies’ climate disclosures, such as through exempt offerings, or its oversight of certain investment advisers and funds?
The SEC’s consideration of new climate change regulations occurs as China — the world’s leading producer of greenhouse gas emissions — scraps its climate goals to prioritize economic growth.